Canada Household Debt at Record High

Canadian household debt as a share of income hit another record in the third quarter as the pace of borrowing outstripped wage gains, Statistics Canada showed on Wednesday, AAP reported. The ratio of debt to disposable income rose to 166.9% from an adjusted 166.4% in the second quarter. That meant Canadians owed $1.67 for every dollar of disposable income they had. The Bank of Canada has flagged the high level of debt as a potential vulnerability for the financial system and is expected to update its view in a report on Thursday. Years of low interest rates since the financial crisis, as well as rising home prices, have encouraged Canadians to take on more and more debt. Household credit market debt, which includes consumer credit, mortgages and non-mortgage loans, rose 1.3% to $2.005 billion from $1.98 billion in the second quarter. Mortgages made up the bulk of the total, standing at $1.31 billion, while consumer credit was $590 billion. Disposable income increased by just 1%.